TABLE OF CONTENTS
Page
COUNTRYWIDE FUNDING CORPORATION: MORTGAGE LOAN WAREHOUSING
AGREEMENT: FACILITY A ....................................... 1
RECITALS ........................................... 1
AGREEMENT ........................................... 1
1. Facility A Credit Facilities ........................ 1
1(a) Primary Loan Facility ......................... 1
1(b) Negotiated Loan Facility ...................... 2
1(c) Swing Loan Facility ........................... 3
1(d) Letter of Credit Facility ..................... 3
1(e) GNMA Pool Advance Facility .................... 4
2. Requests for Credit Events and Issuance of CPNs;
Funding ........................................... 4
2(a) Requests for Credit Events .................... 4
2(b) Direct and Discount Primary Loans ............. 5
2(c) Funding of Facility A Loans and GNMA Pool
Advance Loans ................................. 5
2(d) Sale and Assignment of Discount Loans by
Balance Banks ................................. 6
2(e) Funding ....................................... 7
3. Payment of Principal and L/C Drawings; Prepayments .. 7
3(a) Required Principal Payments ................... 7
3(b) Prepayments ................................... 7
4. Calculation and Payment of Interest; Related
Provisions .......................................... 8
4(a) Interest on Direct Loans and Swing Loans ...... 8
4(b) Interest on Discount Loans .................... 9
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4(c) Interest on Negotiated Loans .................. 9
4(d) Interest on GNMA Pool Advance Loans ........... 9
4(e) Interest on L/C Drawings ...................... 9
4(f) Payment of Interest ........................... 9
4(g) Inability to Determine Rate ................... 10
4(h) Funding Indemnification ....................... 10
4(i) Illegality; Impracticality .................... 11
4(j) Requirements of Law; Increased Costs .......... 11
4(k) Taxes ......................................... 12
4(l) Treatment of Qualifying Balances; Indemnity ... 13
5. Miscellaneous Lending Provisions .................... 14
5(a) Use of Proceeds ............................... 14
5(b) Assumption of Funding/Purchase ................ 14
5(c) Notes ......................................... 14
5(d) Interest and Fee Billing and Payment .......... 15
5(e) Nature and Place of Payments .................. 15
5(f) Post-Default Interest ......................... 16
5(g) Computations .................................. 16
5(h) Disbursement of Payments Received ............. 16
5(i) Capital Requirements .......................... 17
5(j) Fees .......................................... 17
5(k) Wire Transfers of Funds ....................... 17
6. Security Agreement; Guaranty; Subordination;
Additional Documents ................................ 18
6(a) Security Agreement ............................ 18
6(b) Guaranty and Subordination Agreement .......... 18
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6(c) Further Documents ............................. 18
7. Conditions Precedent ................................ 18
7(a) First Credit Event ............................ 18
7(b) All Credit Events ............................. 20
8. Representations and Warranties of the Company ....... 21
8(a) Financial Condition ........................... 21
8(b) No Change ..................................... 21
8(c) Corporate Existence; Compliance with Law ...... 21
8(d) Corporate Power; Authorization; Enforceable
Obligations ................................... 22
8(e) No Legal Bar .................................. 22
8(f) No Material Litigation ........................ 22
8(g) Taxes ......................................... 22
8(h) Investment Company Act ........................ 22
8(i) Subsidiaries .................................. 23
8(j) Federal Reserve Board Regulations ............. 23
8(k) ERISA ......................................... 23
8(l) Assets ........................................ 23
9. Affirmative Covenants ............................... 23
9(a) Financial Statements .......................... 23
9(b) Certificates; Reports; Other Information ...... 24
9(c) Payment of Indebtedness ....................... 25
9(d) Maintenance of Existence and Properties ....... 25
9(e) Inspection of Property; Books and Records;
Discussions ................................... 25
9(f) Notices ....................................... 26
9(g) Expenses ...................................... 26
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9(h) Credit Documents .............................. 27
9(i) Insurance ..................................... 27
9(j) CPN Program ................................... 27
10. Negative Covenants .................................. 27
10(a) Liens ......................................... 27
10(b) Mandatory Coverage ............................ 28
10(c) Indebtedness .................................. 28
10(d) Consolidation and Merger ...................... 28
10(e) Acquisitions .................................. 29
10(f) Payment of Dividends .......................... 29
10(g) Purchase or Retirement of Stock ............... 29
10(h) Investments; Advances; Receivables ............ 29
10(i) Sale of Assets ................................ 29
10(j) Debt to Adjusted Net Worth Ratio .............. 30
10(k) Current Ratio ................................. 30
10(l) Minimum Adjusted Net Worth .................... 30
10(m) Minimum Net Worth ............................. 30
10(n) Minimum Inventory and Unencumbered Servicing
Portfolio ..................................... 30
10(o) Restriction on Refinance Risk Debt ............ 31
11. Events of Default ................................... 31
12. Agency Provisions ................................... 34
12(a) Appointment ................................... 34
12(b) Delegation of Duties .......................... 34
12(c) Exculpatory Provisions ........................ 35
12(d) Reliance by Agent ............................. 35
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12(e) Notice of Default; Agreement to Advance ....... 36
12(f) Non-Reliance on Agent and Other Lenders ....... 36
12(g) Indemnification ............................... 37
12(h) Agent in Its Individual Capacity .............. 37
12(i) Successor Agents .............................. 37
12(j) Sharing of Set-Offs ........................... 38
13. Miscellaneous Provisions ............................ 38
13(a) No Assignment ................................. 38
13(b) Amendment ..................................... 38
13(c) Cumulative Rights; No Waiver .................. 39
13(d) Entire Agreement; Severability ................ 39
13(e) Survival ...................................... 40
13(f) Notices ....................................... 40
13(g) Governing Law ................................. 40
13(h) Counterparts .................................. 40
14. Additional Lenders; Assignments and Participations;
Increases in Availability ........................... 40
14(a) Addition of New Lender ........................ 40
14(b) Assignments Among Existing Lenders ............ 42
14(c) Minimum Loan Commitment ....................... 43
14(d) Sub-Participation by Lenders .................. 44
14(e) Federal Reserve Bank .......................... 44
14(f) Increases in Availability ..................... 44
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COUNTRYWIDE FUNDING CORPORATION:
MORTGAGE LOAN WAREHOUSING AGREEMENT: FACILITY A
THIS MORTGAGE LOAN WAREHOUSING AGREEMENT: FACILITY A (the
"Agreement") is made and dated as of the 15th day of November, 1993, by
and among the lenders signatory hereto (collectively, the "Lenders"),
THE FIRST NATIONAL BANK OF CHICAGO, a national banking association
("FNBC"), as credit agent for the Lenders (in such capacity, the "Credit
Agent"), FIRST CHICAGO NATIONAL PROCESSING CORPORATION, a Delaware
corporation, as collateral agent for the Lenders (in such capacity, the
"Collateral Agent"), ABN AMRO BANK N.V., LOS ANGELES INTERNATIONAL
BRANCH, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, THE BANK
OF NEW YORK, THE CHASE MANHATTAN BANK, N.A., CREDIT LYONNAIS SAN
FRANCISCO BRANCH, FNBC and NATIONSBANK OF TEXAS, N.A., as managing
co-agents for the Lenders (in such capacity, the "Managing Co-Agents"),
BANKERS TRUST COMPANY, CANADIAN IMPERIAL BANK OF COMMERCE, CITICORP USA,
INC., THE LONG-TERM CREDIT BANK OF JAPAN, LTD., LOS ANGELES AGENCY, as
co-agents for the Lenders (in such capacity, the "Co-Agents"), and
COUNTRYWIDE FUNDING CORPORATION, a New York corporation (the "Company").
RECITALS
A. Pursuant to that certain Mortgage Loan Warehousing
Agreement: Facility A, dated as of December 4, 1992 among certain of
the Lenders, the Collateral Agent, the Credit Agent, the Company and
others (as amended and extended from time to time to date, the "Existing
Facility A Agreement"), certain of the Lenders agreed to extend credit
to the Company on the terms and subject to the conditions set forth more
particularly therein.
B. The current parties to the Existing Facility A Agreement
desire to terminate the Existing Facility A Agreement and replace the
credit facility evidenced thereby with this Agreement.
NOW, THEREFORE, in consideration of the above Recitals and for
other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Facility A Credit Facilities.
1(a) Primary Loan Facility. On the terms and subject to
the conditions set forth herein, the Lenders severally agree that they
shall, from time to time to but not including the Facility A Maturity
Date (as such term and capitalized terms not otherwise defined herein
are defined in the Glossary attached hereto as Annex I), directly, or
indirectly by purchase from a Balance Bank, advance their Primary Loan
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Percentage Share of loans (the "Facility A Primary Loans" or a
"Facility A Primary Loan") to the Company in amounts such that:
(1) The aggregate amount of Facility A Primary Loans
outstanding does not exceed at any date the lesser of:
(i) The Facility A Primary Loan Credit Limit;
and
(ii) The lesser of: a. the Aggregate Credit
Limit, and b. the Collateral Value of the Borrowing Base minus,
in each case, the sum of: (A) Negotiated Loans and Swing Loans
outstanding, (B) the amount available for drawing under
Outstanding Letters of Credit, (C) unrepaid L/C Drawings, (D)
the GNMA Pool Advance Commitment, (E) Verified Outstanding
CPNs, (F) Facility B Loans outstanding and (G) outstanding
Funding Checks, and minus, in addition, in the case of the
Collateral Value of the Borrowing Base, the Current Refinance
Risk Debt Exposure; and
(2) The aggregate dollar amount of each Lender's
Primary Loan Percentage Share of Facility A Primary Loans and
Facility B Loans outstanding does not exceed such Lender's Maximum
Primary Loan Commitment.
In calculating the availability of Facility A Primary Loans on any date,
Loans outstanding, Verified Outstanding CPNs and Current Refinance Risk
Debt Exposure shall not include any of such items which will be repaid
with Loans to be advanced on such date.
1(b) Negotiated Loan Facility. On the terms and subject
to the conditions set forth herein, any Lender may from time to time to
but not including the Facility A Maturity Date in its sole and absolute
discretion offer to make loans ("Negotiated Loans" or a "Negotiated
Loan") to the Company in such amounts, at such interest rates and for
such terms (not to extend beyond the Facility A Maturity Date) as such
Lender and the Company may agree; provided, however, that in no event
will any Lender advance any Negotiated Loan to the Company nor will the
Company accept the proceeds of any Negotiated Loan if upon the funding
thereof the aggregate amount of Negotiated Loans outstanding would
exceed the lesser of: (1) the sum of the Facility A Primary Loan Credit
Limit, the Swing Loan Commitment, the GNMA Pool Advance Commitment and
the aggregate L/C Commitments, and (2) the Collateral Value of the
Borrowing Base minus, in each case, the sum of: (i) Facility A Primary
Loans and Swing Loans outstanding, (ii) the amount available for drawing
under Outstanding Letters of Credit, (iii) unrepaid L/C Drawings, (iv)
the GNMA Pool Advance Commitment, (v) Verified Outstanding CPNs, (vi)
Facility B Loans outstanding and (vii) outstanding Funding Checks, and
minus, in addition, in the case of the Collateral Value of the Borrowing
Base, the Current Refinance Risk Debt Exposure. In calculating the
availability of Negotiated Loans on any date, Loans outstanding,
Verified Outstanding CPNs and Current Refinance Risk Debt Exposure shall
not include any of such items which will be repaid with Loans to be
advanced on such date. The agreement of a Lender to make a Negotiated
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Loan hereunder shall not to any extent reduce such Lender's obligation
to fund Facility A Primary Loans or Facility B Loans to the extent of
such Lender's Maximum Primary Loan Commitment, it being expressly
acknowledged and agreed that the agreement to make Negotiated Loans is
optional on the part of such Lender and in addition to its Maximum
Primary Loan Commitment.
1(c) Swing Loan Facility. On the terms and subject to the
conditions set forth herein, FNBC agrees that it shall, from time to
time to but not including the Facility A Maturity Date advance loans
(the "Swing Loans" or a "Swing Loan") to the Company in amounts such
that the aggregate amount of Swing Loans outstanding does not exceed at
any date the lesser of:
(1) The Swing Loan Commitment; and
(2) The lesser of: (i) the Aggregate Credit Limit,
and (ii) the Collateral Value of the Borrowing Base minus, in
each case, the sum of: a. Facility A Primary Loans and
Negotiated Loans outstanding, b. the amount available for
drawing under Outstanding Letters of Credit, c. unrepaid L/C
Drawings, d. the GNMA Pool Advance Commitment, e. Verified
Outstanding CPNs, f. Facility B Loans outstanding and g.
outstanding Funding Checks, and minus, in addition, in the case
of the Collateral Value of the Borrowing Base, the Current
Refinance Risk Debt Exposure;
In calculating the availability of Swing Loans on any date, Loans
outstanding, Verified Outstanding CPNs and Current Refinance Risk Debt
Exposure shall not include any of such items which will be repaid with
Loans to be advanced on such date.
1(d) Letter of Credit Facility. On the terms and subject
to the conditions set forth herein, each L/C Issuing Lender severally
agrees that it will issue, from time to time from the date hereof to and
including the Facility A Maturity Date, letters of credit (a "Letter of
Credit" and, collectively and severally, the "Letters of Credit") for
the account of the Company in favor of the Mortgage Backed Securities
Clearing Corporation (the "MBSCC") for the purpose of allowing the
Company to meet its margin requirements with the MBSCC; provided,
however, that the aggregate dollar amount available for drawing under
all Outstanding Letters of Credit:
(1) Issued by such L/C Issuing Lender shall not
exceed such L/C Issuing Lender's L/C Commitment at such date; and
(2) Issued by all L/C Issuing Lenders shall not
exceed the lesser of: (i) the Aggregate Credit Limit, and
(ii) the Collateral Value of the Borrowing Base minus, in each
case, the sum of: a. Loans outstanding, b. unrepaid L/C Drawings,
c. the GNMA Pool Advance Commitment, d. Verified Outstanding CPNs,
and e. outstanding Funding Checks, and minus, in addition, in the
case of the Collateral Value of the Borrowing Base, the Current
Refinance Risk Debt Exposure.
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In calculating the availability of Letters of Credit on any date,
Loans outstanding, Verified Outstanding CPNs and Current Refinance
Risk Debt Exposure shall not include any of such items which will be
repaid with Loans to be advanced on such date. The amount and
expiration date of each Letter of Credit shall be as agreed to by each
L/C Issuing Lender and the Company; provided, however, that in no
event may any Letter of Credit issued hereunder have an expiration
date later than the third Business Day immediately preceding the
Facility A Maturity Date or automatically renew or be renewed to a
date beyond such date. Each Letter of Credit issued by a L/C Issuing
Lender shall be in form customarily issued by such L/C Issuing Lender.
Each L/C Issuing Lender shall promptly notify the Credit Agent of the
issuance of a Letter of Credit and of any L/C Drawing and shall at and
as of the end of each calendar quarter, and at such other times as the
Credit Agent may reasonably request, notify the Credit Agent in
writing of the aggregate amount available for drawing under
Outstanding Letters of Credit and unrepaid L/C Drawings at such date.
1(e) GNMA Pool Advance Facility. On the terms and subject
to the conditions set forth in the GNMA Pool Advance Agreement, the GNMA
Pool Advance Lender agrees that it shall, from time to time to but not
including the Facility A Maturity Date, make loans (the "GNMA Pool
Advance Loans" or a "GNMA Pool Advance Loan") to the Company in an
aggregate amount not to exceed the GNMA Pool Advance Commitment.
2. Requests for Credit Events and Issuance of CPNs; Funding.
2(a) Requests for Credit Events.
(1) Subject to Paragraph 4(a) below, on any Business
Day that the Company desires to borrow Loans or request the issuance
of a Letter of Credit hereunder, it shall deliver a Loan Request,
Interest Rate Election and Payoff Notice to the Credit Agent no
later than: (i) in the case of Facility A Primary Loans, GNMA Pool
Advance Loans and Letters of Credit, 10:00 a.m. (Los Angeles time);
(ii) in the case of Negotiated Loans, 12:00 noon (Los Angeles time);
and (iii) in the case of Swing Loans, 2:00 p.m. (Los Angeles time)
on such date. Said Loan Request, Interest Rate Election and Payoff
Notice shall, as applicable, identify the Lender which has agreed to
fund any Negotiated Loan and the L/C Issuing Lender which is to
issue any Letter of Credit. Except for a request for a Negotiated
Loan or a Swing Loan made after 10:00 a.m. (Los Angeles time) on a
given date, only one consolidated Loan Request, Interest Rate
Election and Payoff Notice requesting Facility A Loans and/or
Facility B Loans and/or GNMA Pool Advance Loans and/or Letters of
Credit shall be submitted to the Credit Agent on any date. Any
request for Facility A Primary Loans and Facility B Loans shall be
in such amount that the aggregate dollar amount of Facility A
Primary Loans and Facility B Loans which the Lenders are required to
actually newly fund with respect thereto (after giving effect to the
provisions of Paragraph 8(a) of the Security Agreement) is not less
than $10,000,000.00, and any request for Swing Loans shall be in an
amount not less than $5,000,000.00. On each Business Day, the
Credit Agent shall notify the applicable Lenders (which notification
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may be telephonic and, if telephonic, shall be promptly confirmed in
writing) no later than 11:00 a.m. (Los Angeles time) (or in the case
of a Negotiated Loan, 1:00 p.m. (Los Angeles time) or in the case of
a Swing Loan, 2:30 p.m. (Los Angeles time)) of whether or not a Loan
Request, Interest Rate Election and Payoff Notice was delivered to
the Credit Agent on such Business Day and of the aggregate amount of
Credit Events which will occur on such date.
(2) The Company may request the Credit Agent to
facilitate the approval for the issuance of CPNs on any Business Day
by delivering to the Credit Agent no later than 8:30 a.m. (Los
Angeles time) on such day a duly completed CPN Issuance Request.
2(b) Direct and Discount Primary Loans. The Company may
request that Facility A Primary Loans be made, at the election of the
Company as set forth on the related Loan Request, Interest Rate Election
and Payoff Notice:
(1) By the Balance Banks in the form of Discount
Loans; provided, however, that any request for Discount Loans may be
made only in the Loan Request, Interest Rate Election and Payoff
Notice provided for the initial Credit Events and, thereafter, the
Loan Request, Interest Rate Election and Payoff Notice delivered on
the last day of the Discount Loan Interest Period with respect to
the then outstanding Discount Loans or, if no Discount Loans are
then outstanding, on the fifth and twentieth days of each calendar
month (or if any such day is not a Business Day, the next succeeding
Business Day) (the permitted dates for funding of Discount Loans
being referred to herein as "Discount Loan Funding Dates"); and,
provided, further, that as a condition precedent to the Company's
right to request any Balance Bank to fund a Discount Loan, the
Company shall have delivered to the Credit Agent a Pre-Funding
Notice thereof no later than 10:00 a.m. (Los Angeles time) three
Eurodollar Business Days prior thereto (the Credit Agent hereby
agreeing to promptly transmit by facsimile transmission said Pre-
Funding Notice to the applicable Balance Bank and each of the
Lenders); and/or
(2) By the Lenders in the form of Direct Loans on
any Business Day.
2(c) Funding of Facility A Loans and GNMA Pool Advance
Loans. Facility A Loans and GNMA Pool Advance Loans requested pursuant
to any Loan Request, Interest Rate Election and Payoff Notice shall be
funded, subject to the provisions of Paragraph 8(a) of the Security
Agreement, as follows:
(1)(i) Each Balance Bank shall make Discount Loans
net of the applicable Balance Bank Discount, each Lender shall make
its Primary Loan Percentage Share of Direct Loans and the GNMA Pool
Advance Lender shall make GNMA Pool Advance Loans available by
wiring the amount thereof in immediately available same day
(including Federal) funds, to the Credit Agent to the Pre-
Disbursement Account no later than 12:30 p.m. (Los Angeles time) on
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the proposed funding date, such amounts to be held pending
disbursement as provided in subparagraph (2) below; (ii) each Lender
agreeing to make a Negotiated Loan shall make the same available by
wiring the amount thereof in immediately available same day
(including Federal) funds, to the Credit Agent to the Pre-
Disbursement Account no later than 2:30 p.m. (Los Angeles time) on
the proposed funding date; and (iii) FNBC shall make each Swing Loan
available by wiring the amount thereof in immediately available same
day (including Federal) funds to such accounts as the Company may
direct no later than 3:00 p.m. (Los Angeles time) on the proposed
funding date.
(2) On or before 11:00 a.m. (Los Angeles time) on
each proposed funding date the Credit Agent shall transmit the Loan
Request, Interest Rate Election and Payoff Notice (and any CPN
Issuance Request) received by the Credit Agent on such date to the
Collateral Agent and request the Collateral Agent to make a
Determination of Availability pursuant to Paragraph 7 of the
Security Agreement with respect thereto. If the Collateral Agent
notifies the Credit Agent that the Collateral Value of the Borrowing
Base is sufficient to support the requested Credit Events (or a
portion thereof), the Credit Agent shall so notify the Company and
shall, subject to the additional conditions set forth in Paragraph
7(b) below, disburse amounts held in the Pre-Disbursement Account to
the Funding Account and/or the Commercial Paper Account, as
applicable, no later than 12:45 p.m. (Los Angeles time) on the
proposed funding date. Amounts held in the Pre-Disbursement Account
which cannot be disbursed to the Company as a result of a negative
Determination of Availability or non-satisfaction of the additional
conditions set forth in Paragraph 7(b) below shall constitute cash
collateral for the Obligations, shall be transferred to the
Settlement Account prior to the opening of business of the Credit
Agent on the Business Day following the date deposited in the Pre-
Disbursement Account and disbursed to the Company only upon a
favorable Determination of Availability and subject to the
additional conditions set forth in Paragraph 7(b) below. Such
amounts shall constitute "Loans" to the Company for all purposes of
the Credit Documents and shall be payable, with interest, to the
same extent as if such amounts had been fully disbursed.
2(d) Sale and Assignment of Discount Loans by Balance
Banks. Simultaneously with the making of a Discount Loan by a Balance
Bank on a Discount Loan Funding Date, such Balance Bank agrees to sell
and assign, and does hereby sell and assign, to each Lender (including
such Balance Bank in its capacity as a Lender), and each Lender
irrevocably agrees to purchase and acquire, its Primary Loan Percentage
Share of such Discount Loan for a purchase price equal to such Lender's
Primary Loan Percentage Share of the principal amount of such Discount
Loan less the Lender Discount applicable thereto. Such purchase price
will be paid to the Credit Agent for the account of the applicable
Balance Banks in immediately available same day (including Federal)
funds at the Contact Office of the Credit Agent no later than 12:15 p.m.
(Los Angeles time) on the Discount Loan Funding Date. The Company
hereby acknowledges and consents to the assignment of Discount Loans by
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the Balance Banks to the Lenders hereunder. The Company, the Credit
Agent and the Collateral Agent shall deem and treat each Lender as the
creditor in respect of its Primary Loan Percentage Share of each
Discount Loan to the same extent as if such Discount Loan were a Direct
Loan as to which such Lender had advanced its Primary Loan Percentage
Share.
2(e) Funding. Each Lender shall be entitled to fund all
or any portion of its Primary Loan Percentage Share of Facility A
Primary Loans, Negotiated Loans, Swing Loans and GNMA Pool Advance
Loans, as applicable, in any manner it may determine in its sole
discretion, including, without limitation, in the Grand Cayman inter-
bank market, the eurocurrency inter-bank market and within the United
States, but all calculations and transactions hereunder shall be
conducted as though all Lenders actually fund the purchase of amounts
funded on Discount Loans and Eurodollar Loans by them hereunder through
the purchase of offshore dollar deposits in such amounts with maturities
corresponding to the applicable Interest Periods.
3. Payment of Principal and L/C Drawings; Prepayments.
3(a) Required Principal Payments. Subject to the
provisions of Paragraph 3(b) below, the Company shall pay to the Credit
Agent for the account of the applicable Lender or Lenders, including the
GNMA Pool Advance Lender and the L/C Issuing Lenders:
(1) The unpaid principal balance of each Discount
Loan, Eurodollar Loan and Negotiated Loan on the last day of the
applicable Interest Period;
(2) The unpaid principal balance of each Alternate
Base Rate Loan on the Facility A Maturity Date;
(3) The unpaid principal balance of each GNMA Pool
Advance Loan on or before the earlier of: (i) the thirtieth day
following the date advanced and (ii) the Facility A Maturity Date;
and
(4) The full amount of each L/C Drawing on the date
thereof.
3(b) Prepayments.
(1) The Company may voluntarily prepay Direct Loans,
Negotiated Loans, Swing Loans and GNMA Pool Advance Loans in whole
or in part and may voluntarily prepay Discount Loans in whole at any
time; provided, however, that in the case of prepayment of a
Discount Loan, the Company shall pay the net funded amount of such
Discount Loan actually advanced by the Balance Bank with respect
thereto with interest accrued on such net funded amount calculated
at the Balance Bank Discount from the date of funding to but not
including the date of prepayment; and, provided further, that any
prepayment of a Direct Loan, Negotiated Loan, Swing Loan or GNMA
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Pool Advance Loan shall be accompanied by accrued but unpaid
interest on the portion being prepaid.
(2) Facility A Loans and GNMA Pool Advance Loans are
subject to mandatory prepayment pursuant to Paragraph 6 of the
Security Agreement and, in addition, by application of proceeds of
the sale or other disposition of Collateral as provided in the
Security Agreement.
(3) The Company shall pay in connection with any
prepayment hereunder any amount payable on account thereof pursuant
to Paragraph 4(h) below concurrently with such prepayment.
4. Calculation and Payment of Interest; Related Provisions.
4(a) Interest on Direct Loans and Swing Loans.
(1) The Company shall pay interest to each Lender on
such Lender's Primary Loan Percentage Share of Direct Loans and
shall pay interest to FNBC on Swing Loans outstanding calculated, at
the election of the Company made from time to time as permitted
herein and set forth on a duly executed Loan Request, Interest Rate
Election and Payoff Notice, at either: (i) the Alternate Base Rate,
and/or (ii) the Applicable Eurodollar Rate. Each Lender's Primary
Loan Percentage Share of Direct Loans and FNBC's Swing Loans bearing
interest at the Alternate Base Rate shall be referred to herein as
"Alternate Base Rate Loans"; and each Lender's Primary Loan
Percentage Share of Direct Loans and FNBC's Swing Loans bearing
interest at the Applicable Eurodollar Rate shall be referred to
herein as "Eurodollar Loans".
(2) The Company may elect from time to time to
convert Direct Loans and Swing Loans from Eurodollar Loans to
Alternate Base Rate Loans or to have Direct Loans and Swing Loans
funded as Alternate Base Rate Loans by giving the Credit Agent
irrevocable notice of such election as set forth on a duly executed
Loan Request, Interest Rate Election and Payoff Notice delivered on
the proposed conversion or funding date; provided, however, that any
conversion of Eurodollar Loans may only be made on the last day of
the applicable Interest Period. The Company may elect from time to
time to convert Direct Loans and Swing Loans from Alternate Base
Rate Loans to Eurodollar Loans or to have Direct Loans and Swing
Loans funded as Eurodollar Loans by giving the Credit Agent at least
three Eurodollar Business Days' prior irrevocable notice of such
election by delivery of a duly executed Loan Request, Interest Rate
Election and Payoff Notice. Upon receipt of any such notice, the
Credit Agent shall promptly notify each of the Lenders affected
thereby thereof. No Direct Loan or Swing Loan shall be funded as or
converted into a Eurodollar Loan if an Event of Default or Potential
Default has occurred and is continuing on the day occurring two
Business Days prior to the date of the funding or conversion
requested by the Company.
V82606[7083]94 8
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(3) Any Eurodollar Loan may be continued as such
upon the expiration of the Interest Period applicable thereto by
giving the Credit Agent (which shall notify the Lenders) at least
three Eurodollar Business Days' prior irrevocable notice of such
election as set forth on a duly executed Loan Request, Interest Rate
Election and Payoff Notice; provided, however, that no Eurodollar
Loan may be continued as such when any Event of Default or Potential
Default has occurred and is continuing, but shall be automatically
converted to an Alternate Base Rate Loan on the last day of the then
current Interest Period applicable thereto. The Credit Agent shall
notify the Lenders and the Company promptly that such automatic
conversion will occur. If the Company shall fail to give notice as
provided above, the Company shall be deemed to have elected to
convert the affected Eurodollar Loan to an Alternate Base Rate Loan
on the last day of the Interest Period applicable thereto.
(4) The Credit Agent shall give prompt written
notice (or notice by telephone immediately confirmed in writing) to
the Company and the Lenders of the applicable interest rate
determined by the Credit Agent.
(5) Under no circumstances shall the Lenders be
required to make or maintain Eurodollar Loans under this Agreement
and the Facility B Agreement with more than an aggregate number of
eight (8) different Interest Periods.
4(b) Interest on Discount Loans. Since Discount Loans
will be funded by the Balance Banks net of the applicable Balance Bank
Discount, no additional interest shall be payable thereon prior to the
maturity date thereof.
4(c) Interest on Negotiated Loans. The Company shall pay
interest to any Lender making a Negotiated Loan from the date advanced
to but not including the date of payment calculated at the Negotiated
Loan Interest Rate applicable thereto.
4(d) Interest on GNMA Pool Advance Loans. The Company
shall pay interest on GNMA Pool Advance Loans from the date advanced to
but not including the date of payment calculated at such rates and at
such times as may be established in writing from time to time by the
Company and the GNMA Pool Advance Lender.
4(e) Interest on L/C Drawings. L/C Drawings shall bear
interest calculated at a per annum rate equal to the Alternate Bate Rate
plus one percent (1%) from the date such L/C Drawing occurs to but not
including the date paid in full.
4(f) Payment of Interest. The Company shall pay interest
on Alternate Base Rate Loans and GNMA Pool Advance Loans monthly, in
arrears, on the fifth day of each month for the period from and
including the first day of the immediately preceding month to and
including the last day of such month, and the Company shall pay interest
on Eurodollar Loans and Negotiated Loans on the last day of the
V82606[7083]94 9
<PAGE>
applicable Interest Period relating thereto, in each case as provided
more specifically in Paragraph 5(d) below.
4(g) Inability to Determine Rate. In the event that the
Credit Agent shall have determined (which determination shall be
conclusive and binding upon the Company) that by reason of circumstances
affecting the interbank eurodollar market adequate and reasonable means
do not exist for ascertaining the Eurodollar Rate for any given Interest
Period, the Credit Agent shall forthwith give telephonic notice
(promptly confirmed in writing) of such determination to each Lender and
to the Company at least two Eurodollar Business Days prior to, as the
case may be, the proposed funding date of a Discount Loan, the
conversion date of an Alternate Base Rate Loan to a Eurodollar Loan or
the proposed funding or continuation date of a Direct Loan or a Swing
Loan as a Eurodollar Loan. If such notice is given: (1) any Facility A
Loan that was to have been funded as a Discount Loan shall be funded as
a Direct Loan, (2) any Direct Loan or Swing Loan that was to have been
converted to or funded as a Eurodollar Loan shall, subject to the
provisions hereof, be continued or funded as an Alternate Base Rate
Loan, and (3) any outstanding Eurodollar Loan shall be converted, on the
last day of the then current Interest Period with respect thereto, to an
Alternate Base Rate Loan. Until such notice has been withdrawn by the
Credit Agent, the Company shall not have the right to have a Facility A
Loan funded as a Discount Loan or to convert a Direct Loan or Swing Loan
to or fund or continue a Direct Loan or a Swing Loan as a Eurodollar
Loan.
4(h) Funding Indemnification. In addition to all other
payment obligations hereunder, in the event: (1) any Facility A Loan
funded as a Discount Loan or which is outstanding as a Eurodollar Loan
is prepaid prior to the last day of the applicable Interest Period,
whether following a mandatory prepayment, application of proceeds from
the sale of Collateral or otherwise, including, without limitation,
pursuant to Paragraphs 14(a), 14(b) and 14(c) below, or (2) the Company
shall fail to make a conversion into or a borrowing as a Eurodollar Loan
after the Company has given notice thereof as provided in Paragraph
4(a)(2) above, or (3) the Company shall fail to continue any Direct Loan
or a Swing Loan which it has elected to have continued as a Eurodollar
Loan, or (4) the Company shall fail to borrow any Facility A Primary
Loan as a Discount Loan after giving a Pre-Funding Notice with respect
thereto or fail to prepay any Discount Loan after having given notice of
its intention so to do, or (5) the Company shall fail to make any
payment of principal or interest on any Facility A Loan when due, then
the Company shall immediately pay to each of the Lenders, through the
Credit Agent, an additional amount compensating such Lender for all
losses, costs and expenses incurred by such Lender in connection
therewith, including, without limitation, such as may arise out of re-
employment of funds obtained by such Lender or from fees payable to
terminate the deposits from which such funds were obtained, such losses,
costs and expenses and the method of calculation thereof being set forth
in reasonable detail in a statement delivered to the Company by such
Lender, such statement to be conclusive in the absence of manifest
error. Under no circumstances shall any Lender have any obligation to
remit monies to the Company upon prepayment of any Discount Loan or any
V82606[7083]94 10
<PAGE>
Eurodollar Loan, even under circumstances which do not result in the
necessity for the payment by the Company of any amount hereunder. The
provisions hereof shall survive termination of this Agreement and
payment of the outstanding Facility A Loans and GNMA Pool Advance Loans
and all other Facility A Obligations.
4(i) Illegality; Impracticality. Notwithstanding any
other provisions herein, if any law, regulation, treaty or directive or
any change therein or in the interpretation or application thereof,
shall or may in the opinion of any Lender make it unlawful or
impractical for such Lender to make or maintain Eurodollar Loans or
purchase its Primary Loan Percentage Share of Discount Loans: (1) the
commitment of such Lender hereunder to purchase its Primary Loan
Percentage Share of Discount Loans or to make Eurodollar Loans, as
applicable, shall forthwith be cancelled and (2) such Lender's Primary
Loan Percentage Share of Facility A Primary Loans outstanding as
Discount Loans or then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Alternate Base Rate Loans at the end of their
respective Interest Periods or within such earlier period as required by
law. In the event the commitment of any Lender to purchase its Primary
Loan Percentage Share of Discount Loans shall be terminated hereunder,
the agreement of the Balance Banks to fund Discount Loans shall be
reduced in a like amount. In the event of a conversion of any
Facility A Loan prior to the end of its applicable Interest Period the
Company hereby agrees promptly to pay each Lender, upon its written
demand, the amounts required pursuant to Paragraph 4(h) above, it being
agreed and understood that such conversion shall constitute a prepayment
for all purposes hereof. The provisions hereof shall survive the
termination of this Agreement and payment of the outstanding Facility A
Loans and GNMA Pool Advance Loans and all other Facility A Obligations.
4(j) Requirements of Law; Increased Costs. In the event
that a change subsequent to the date hereof in any applicable law,
regulation, treaty or directive or in the governmental or judicial
interpretation or application thereof, or compliance by any Lender with
any request or directive (whether or not having the force of law) issued
subsequent to the date hereof by any central bank or other governmental
authority, agency or instrumentality:
(1) Does or shall subject any Lender to any tax of
any kind whatsoever with respect to this Agreement or any Facility A
Loans or GNMA Pool Advance Loans made or Letters of Credit issued
hereunder, or changes the basis of taxation of payments to such
Lender of principal, fees, interest or any other amount payable
hereunder (except for changes in the rate of tax on the overall net
income of such Lender);
(2) Does or shall impose, modify or hold applicable
any reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for
the account of, advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of such Lender
which are not otherwise included in the determination of the Balance
Bank Discount, the Lender Discount, the Alternate Base Rate or the
V82606[7083]94 11
<PAGE>
Eurodollar Rate or the rate applicable to a Negotiated Loan, a GNMA
Pool Advance Loan or a L/C Drawing; or
(3) Does or shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making, renewing or maintaining any Facility A Loan or any
GNMA Pool Advance Loan or Letter of Credit or to reduce any amount
receivable in respect thereof then, in any such case, the Company shall
promptly pay to such Lender, upon its written demand, any additional
amounts necessary to compensate such Lender for such additional cost or
reduced amounts receivable as determined by such Lender with respect to
this Agreement or such credit extensions. If a Lender becomes entitled
to claim any additional amounts pursuant to this Paragraph 4(j), it
shall promptly notify the Company of the event by reason of which it has
become so entitled. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by a Lender to the Company
shall be conclusive in the absence of manifest error. The obligations
of the Company under this Paragraph 4(j) shall survive the termination
of this Agreement and the payment of all outstanding Facility A
Obligations.
4(k) Taxes.
(1) All payments made by the Company, the Credit
Agent and the Lenders on account of the Facility A Obligations shall
be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld
or assessed by any Governmental Authority, excluding, in the case of
the Lenders, net income taxes and franchise taxes (imposed in lieu
of net income taxes), imposed on the Lenders, as the case may be, as
a result of a present or former connection between the jurisdiction
of the government or taxing authority imposing such tax, or any
political subdivision or taxing authority thereof or therein, and
such Lender (other than a connection arising solely from such Lender
having executed, delivered or performed its obligations or received
a payment under, or enforced, the Credit Documents) (all such non-
excluded taxes, levies, imposts, duties, charges, fees, deductions
and withholdings being hereinafter called "Taxes"). If any Taxes
are required to be withheld from any amounts payable to any Lender
under the Credit Documents, the amounts so payable by the Company to
the Credit Agent for the benefit of such Lender shall be increased
to the extent necessary to yield to such Lender (after payment of
all Taxes) interest or any such other amounts payable thereunder at
the rates or in the amounts specified in the Credit Documents.
Whenever any Taxes are payable by the Company or on behalf of the
Company, as promptly as possible thereafter the Company shall send
to the Credit Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official
receipt received by the Company showing payment thereof. If the
Company fails to pay any Taxes when due to the appropriate taxing
V82606[7083]94 12
<PAGE>
authority or fails to remit to the Credit Agent the required
receipts or other required documentary evidence, the Company shall
indemnify the Credit Agent and such Lender for any incremental
taxes, interest or penalties that may become payable by the Credit
Agent and the Lenders as a result of any such failure. The
agreements in this subsection shall survive the termination of this
Agreement and the payment of all Facility A Obligations. Each
Lender by executing this Agreement represents and warrants to the
Company and the Credit Agent that at the date of this Agreement no
Taxes are imposed upon such Lender which would result in increased
liability of the Company to such Lender pursuant to this Paragraph
4(k)(1).
(2) Each Lender that is not incorporated under the
laws of the United States of America or a state thereof agrees that
it will deliver to the Company and the Credit Agent (1) two duly
completed copies of United States Internal Revenue Service Form 1001
or 4224 or successor applicable form, as the case may be, and (2) an
Internal Revenue Service Form W-8 or W-9 or successor applicable
form. Each such Lender also agrees to deliver to the Company and
the Credit Agent two further copies of the said Form 1001 or 4224
and Form W-8 or W-9, or successor applicable forms or other manner
of certification, as the case may be, on or before the date that any
such form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent form previously
delivered by it to the Company, and such extensions or renewals
thereof as may reasonably be requested by the Company or the Credit
Agent, unless in any such case an event (including, without
limitation, any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Company and
the Credit Agent. Such Lender shall certify (i) in the case of a
Form 1001 or 4224, that it is entitled to receive payments under
this Agreement without deduction or withholding of any United States
federal income taxes and (ii) in the case of a Form W-8 or W-9, that
it is entitled to an exemption from United States backup withholding
tax.
4(l) Treatment of Qualifying Balances; Indemnity. Each
Balance Bank and the Company will consult from time to time with a view
toward allowing the Company to maintain its deposit balances at such
Balance Bank in types of deposit accounts bearing the lowest reserve
requirements practicable consistent with the flexibility required by the
Company to make frequent withdrawals and deposits. In the event that it
shall be determined at any time that (1) any Balance Bank has
incorrectly characterized deposit accounts maintained by the Company
with such Balance Bank for purposes of determining required reserves,
(2) any Balance Bank has maintained inadequate reserves in respect of
such deposit accounts, (3) the cost of reserves used in the calculation
of the amount of Qualifying Balances at any time was the cost of the
inadequate reserves so maintained or (4) any Balance Bank is required to
maintain retroactive reserves, or to pay other costs, penalties or
V82606[7083]94 13
<PAGE>
charges, as a result thereof, then, in any such event, the Company shall
pay to such Balance Bank on demand the additional amounts necessary to
compensate such Balance Bank for the cost of maintaining such
retroactive reserves and for any other costs, penalties or charges
related thereto, including any amounts arising from a recalculation of
the "Balance Deficiency Fee" referred to in the Balance Bank Agreements.
A certificate as to any additional amounts payable pursuant to this
subsection submitted by a Balance Bank, through the Credit Agent, to the
Company shall be conclusive in the absence of manifest error. The
agreements in this subsection shall survive termination of this
Agreement and payment of all Facility A Obligations.
5. Miscellaneous Lending Provisions.
5(a) Use of Proceeds. The proceeds of Facility A Loans
shall be utilized by the Company solely for the purpose of originating
and/or acquiring Mortgage Loans, to repay L/C Drawings and other
Indebtedness of the Company (including Indebtedness of the Company to
the Parent permitted to be repaid by the Company to the Parent pursuant
to the terms of the Credit Documents and including CPNs) and for other
general working capital purposes. The proceeds of the GNMA Pool Advance
Loans shall be used solely for the purpose of fulfilling the Company's
obligations to GNMA as described in the GNMA Pool Advance Agreement.
5(b) Assumption of Funding/Purchase. The Credit Agent may
(but shall not be obligated to) assume that each Lender has made its
Primary Loan Percentage Share of Facility A Primary Loans and any other
Facility A Loans and GNMA Pool Advance Loans to be advanced by it
available on the funding date therefor and may, in reliance upon such
assumption, make available to the Company on such date a corresponding
amount. If and to the extent any Lender shall not have so made such
amounts available, such Lender and the Company jointly and severally
agree to repay to the Credit Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from
the date such amount is made available to the Company until the date
such amount is repaid to the Credit Agent, at, in the case of the
Company, the interest rate applicable at the time to the subject
Facility A Loan or GNMA Pool Advance Loan and, in the case of the
Lenders, the Federal Funds Rate. If such Lender shall repay to the
Credit Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Primary Loan Percentage Share of such
Facility A Primary Loan or other Facility A Loans or GNMA Pool Advances
Loans for all purposes of the Credit Documents. Nothing contained
herein shall affect the liability of any Lender for its failure to make
its Primary Loan Percentage Share of Facility A Primary Loans or other
Facility A Loans or GNMA Pool Advance Loans available to the Company as
required pursuant to this Agreement and the other Credit Documents.
5(c) Notes. The obligation of the Company to repay Direct
Loans shall be evidenced by notes payable to each Lender, each in the
form of that attached hereto as Exhibit A-1 (the "Facility A Direct Loan
Notes"); the obligation of the Company to repay Discount Loans shall be
evidenced by notes payable to each Lender in the form of that attached
hereto as Exhibit A-2 (the "Facility A Discount Loan Notes"); the
V82606[7083]94 14
<PAGE>
obligation of the Company to repay Negotiated Loans shall be evidenced
by notes payable to each Lender in the form of that attached hereto as
Exhibit A-3 (the "Negotiated Loan Notes"); the obligation of the Company
to repay Swing Loans shall be evidenced by a promissory note payable to
FNBC in the form of that attached hereto as Exhibit A-4 (the "Swing Loan
Note"); and the obligation of the Company to repay GNMA Pool Advance
Loans shall be evidenced by a promissory note payable to the GNMA Pool
Advance Lender in the form of that attached hereto as Exhibit A-5 (the
"GNMA Pool Advance Note").
5(d) Interest and Fee Billing and Payment. The Credit
Agent shall: (1) on or before the first Business Day of each month
notify the Company (which notification may be telephonic) of the
estimated amount of interest payable with respect to Alternate Base Rate
Loans and GNMA Pool Advance Loans as of the fifth day of the current
month for the period from and including the first day of the immediately
preceding month to and including the last day of such month, with the
actual amount confirmed by notification by the Credit Agent to the
Company (which notification may be telephonic and which, if telephonic,
shall be promptly confirmed in writing) given no later than 9:00 a.m.
(Los Angeles time) on the due date of payment thereof; (2) on the last
day of the Interest Period for each Eurodollar Loan and Negotiated Loan
notify the Company (which notification may be telephonic and which, if
telephonic, shall be promptly confirmed in writing) of the amount of
interest payable on such date on account thereof (such notification in
the case of a Negotiated Loan to be based, without independent
verification by the Credit Agent, upon information provided by the
Lender which advanced such Negotiated Loan); (3) on or before the first
Business Day of the first month of each calendar quarter notify the
Company (which notification may be telephonic) of the amount of
commitment fees payable pursuant to Paragraph 2 of the Fee Letter on the
fifth day of such month for the period from and including the first day
of the first month of the immediately preceding calendar quarter to and
including the last day of such calendar quarter, with the actual amount
confirmed by notification by the Credit Agent to the Company (which
notification may be telephonic and which, if telephonic, shall be
promptly confirmed in writing) given no later than 9:00 a.m. (Los
Angeles time) on the due date of payment thereof; and (4) from time to
time upon the request of any Lender deliver to the Company a funding
indemnification billing for amounts payable to such Lender pursuant to
Paragraph 4(h) above or a billing for amounts payable to such Lender
pursuant to Paragraphs 4(j), 4(k) and 4(l) above and Paragraph 5(i)
below. The Company shall pay the full amount of interest and fees of
which it has been notified pursuant to subparagraphs (1) and (3) above
on the fifth day of each month, shall pay the full amount of interest of
which it has been notified pursuant to subparagraph (2) above on the
date such notification is given and shall pay the full amount of each
billing delivered to it pursuant to subparagraph (4) above within five
(5) Business Days thereafter.
5(e) Nature and Place of Payments. Except as otherwise
expressly provided in the Credit Documents, all payments made on account
of the Facility A Obligations shall be made to the Credit Agent at the
Contact Office for distribution to the Lenders, as the Company shall
V82606[7083]94 15
<PAGE>
direct pursuant to a Loan Request, Interest Rate Election and Payoff
Notice (but, in any event, consistent with Paragraph 8 of the Security
Agreement), without set-off or counterclaim in lawful money of the
United States of America in immediately available same day funds, and
must be received by the Credit Agent accompanied by a Loan Request,
Interest Rate Election and Payoff Notice at the Contact Office by
11:30 a.m. (Los Angeles time) on the day of payment, it being expressly
agreed and understood that if a payment is received after 11:30 a.m.
(Los Angeles time) by the Credit Agent or the Credit Agent does not
receive a Loan Request, Interest Rate Election and Payoff Notice
therefor, such payment will be considered to have been made on the next
succeeding Business Day or such later date as the Credit Agent receives
the Loan Request, Interest Rate Election and Payoff Notice therefor and
interest thereon shall be payable by the Company at the then applicable
rate during such extension. If any payment required to be made by the
Company hereunder becomes due and payable on a day other than a Business
Day, the due date thereof shall be extended to the next succeeding
Business Day and interest thereon shall be payable at the then
applicable rate during such extension. The Credit Agent is hereby
authorized to debit accounts of the Company maintained with FNBC for
amounts payable by the Company under this Agreement through the Credit
Agent and the Credit Agent will promptly notify the Company of any such
debit.
5(f) Post-Default Interest. Following the occurrence of
an Event of Default and until such Event of Default is cured or waived
as provided herein, Facility A Obligations shall bear interest at a per
annum rate equal to the Alternate Base Rate plus three percent (3%).
5(g) Computations. All computations of interest and fees
payable hereunder and under the Fee Letter and computations of each
Balance Bank Discount and Lender Discount shall be based upon a year of
360 days for the actual number of days elapsed. The determination by
the Credit Agent of a Balance Bank Discount, a Lender Discount or
interest rate hereunder shall be conclusive and binding on the Company
and the Lenders absent manifest error.
5(h) Disbursement of Payments Received. All amounts
received by the Credit Agent on account of the Obligations shall be
disbursed by the Credit Agent to the Lenders consistent with the
provisions of Paragraph 8 of the Security Agreement by wire transfer
prior to the cut-off deadline of the Federal Reserve Wire System on the
date of receipt if received by the Credit Agent before 11:30 a.m. (Los
Angeles time) and accompanied by a Loan Request, Interest Rate Election
and Payoff Notice (or disbursed on the day of receipt although received
later than 11:30 a.m. (Los Angeles time) with the agreement of the
Credit Agent, the Collateral Agent and any Lender) or if received later
or if the Credit Agent has not received a Loan Request, Interest Rate
Election and Payoff Notice therefor, on the next succeeding Business Day
or such later date as the Credit Agent receives the Loan Request,
Interest Rate Election and Payoff Notice relating thereto, without
interest payable by the Credit Agent.
V82606[7083]94 16
<PAGE>
5(i) Capital Requirements. The Company shall pay from
time to time upon demand such amounts as any Lender may determine to be
necessary to compensate such Lender for all reasonable costs which such
Lender determines are attributable to its making, purchasing or
maintaining its Primary Loan Percentage Share of any Facility A Primary
Loan or other Facility A Loan or GNMA Pool Advance Loan under this
Agreement or its obligation to make or purchase its Primary Loan
Percentage Share of any Facility A Primary Loans or to make any other
Facility A Loan or GNMA Pool Advance Loan, including, without
limitation, reserve requirements attributed to the unused portion of the
Aggregate Credit Limit, in respect of any amount of capital required to
be maintained by such Lender pursuant to any law or regulation of any
jurisdiction or any interpretation, directive or request affecting
banks, savings and loan institutions and/or financial institutions
generally notwithstanding the creditworthiness of any particular bank,
savings and loan institution or other financial institution (whether or
not having the force of law) of any court or governmental or monetary
authority, whether in effect on the date of this Agreement or
thereafter. The obligations of the Company under this Paragraph 5(i)
shall survive the termination of this Agreement and the payment of all
Facility A Loans and all other Facility A Obligations.
5(j) Fees. The Company shall pay:
(1) To the Credit Agent and the Collateral Agent,
such fees as may from time to time be agreed upon in writing by such
Persons and the Company;
(2) To each of the Lenders, the incentive and
commitment fees described in the Fee Letter;
(3) To each of the Balance Banks, the additional
fees described in the Balance Bank Agreements;
(4) To each L/C Issuing Lender, with respect to each
Letter of Credit such issuance fees and modification fees may be
established in writing from time to time by the Company and such L/C
Issuing Lender; and
(5) To the GNMA Pool Advance Lender, fees on account
of the GNMA Pool Advance Commitment in such amounts and at such
times as may be established in writing from time to time by the
Company and the GNMA Pool Advance Lender.
5(k) Wire Transfers of Funds. Notwithstanding anything to
the contrary contained herein and in the other Credit Documents, funds
which the Credit Agent and the Lenders are transmitting by wire transfer
shall be deemed to have been sent and received upon release by the
transmitting party of such funds into the Federal Reserve Wire System.
V82606[7083]94 17
<PAGE>
6. Security Agreement; Guaranty; Subordination; Additional
Documents.
6(a) Security Agreement. As collateral security for,
among other things, the Facility A Obligations, the Company shall
execute and deliver to the Collateral Agent the Security Agreement
pursuant to which the Company shall pledge, assign and grant to the
Collateral Agent for the pro rata, pari passu benefit of the Secured
Parties, and to each of such Persons, a first priority security interest
in and lien upon the Collateral, subject to the release and
reinstatement provisions set forth in Paragraph 28 of the Security
Agreement. In addition, the Company shall execute and deliver to the
Collateral Agent such UCC-1 financing statements as the Collateral Agent
may request.
6(b) Guaranty and Subordination Agreement. As additional
support for, among other things, the Facility A Obligations, the Company
shall execute and deliver and shall cause to be executed and delivered
to the Credit Agent on behalf of the Lenders: (1) the Guaranty and
(2) the Subordination Agreement.
6(c) Further Documents. The Company agrees to execute and
deliver and to cause to be executed and delivered to the Credit Agent or
such Persons as the Credit Agent may direct from time to time such
confirmatory or supplementary security agreements, financing statements,
notices to third parties and other documents, instruments and agreements
as the Credit Agent on behalf of the Lenders may reasonably request,
which are in any of the Lenders' judgment necessary or desirable to
obtain for the Collateral Agent on behalf of the Credit Agent, the
Lenders, and the holders from time to time of Outstanding CPNs the
benefit of the Credit Documents and the Collateral.
7. Conditions Precedent.
7(a) First Credit Event. As conditions precedent to the
Effective Date and the first Credit Event hereunder:
(1) There shall have been delivered to the Credit
Agent, in form and substance and in quantities reasonably
satisfactory to the Lenders and their counsel, each of the
following:
(i) A duly executed copy of this Agreement;
(ii) Duly executed copies of the Facility A
Discount Loan Notes, and the Facility A Direct Loan Notes, the
Negotiated Loan Notes, the Swing Loan Note and the GNMA Pool
Advance Note;
(iii) Duly executed copies of the Security
Agreement accompanied by such UCC-1 financing statements
related thereto as the Collateral Agent may request, the
Guaranty, the Subordination Agreement and the Fee Letter;
V82606[7083]94 18
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(iv) Such credit applications, financial
statements, pro forma financial statements, authorizations and
information concerning the Company and its business, operations
and condition (financial and otherwise) as the Credit Agent or
any Lender may reasonably request;
(v) Certified copies of resolutions of the
Boards of Directors of the Company and the Parent approving the
execution and delivery of all documents required to be
delivered by the Company and the Parent hereunder;
(vi) Certificates of the Secretary or an
Assistant Secretary of each of the Company and the Parent
certifying the names, incumbency and true signatures of the
officers of the Company and the Parent authorized to sign the
documents required to be executed and delivered by the Company
and the Parent hereunder;
(vii) An opinion of counsel for the Company and
the Parent (which counsel may be in-house counsel) in form and
substance satisfactory to the Lenders and covering such matters
as the Lenders may reasonably request;
(viii) A certificate of an executive officer of
each of the Company and the Parent in the form of that attached
hereto as Exhibit B dated as of the date of this Agreement;
(ix) A duly completed Borrowing Base Certificate
dated as of the date of such first Credit Event and a Covenant
Compliance Certificate, dated as of the Interim Date, for each
of the Company and the Parent demonstrating in detail
satisfactory to the Lenders the Company's compliance with the
covenants set forth in Paragraphs 10(h), 10(j), 10(k), 10(l),
10(m), 10(n) and 10(o) below, and the Parent's compliance with
the financial covenants set forth in Paragraphs 11(d), 11(e),
11(f), 11(g) and 11(h) of the Guaranty;
(x) A current Schedule of Approved Investors
acceptable to the Majority Lenders, as evidenced by their
execution of an express written approval thereof; and
(xi) A duly executed copy of the Balance Bank
Agreement with each Balance Bank.
(2) All acts and conditions (including, without
limitation, the obtaining of all necessary regulatory approvals and
the making of all required filings, recordings and registrations)
required to be done and performed and to have happened precedent to
the execution, delivery and performance of the Credit Documents and
to constitute the same legal, valid and binding obligations,
enforceable in accordance with their respective terms, shall have
been done and performed and shall have happened in due and strict
compliance with all applicable laws.
V82606[7083]94 19
<PAGE>
(3) All documentation, including, without limita-
tion, documentation for corporate and legal proceedings in connec-
tion with the transactions contemplated by the Credit Documents,
shall be satisfactory in form and substance to the Lenders and their
counsel.
(4) The Company shall have delivered to each of the
Collateral Agent and the Credit Agent, respectively, a letter
acceptable to each such Person, respectively, regarding the payment
by the Company to each such Person of fees, and the Company shall
have paid all fees required under each such letter to have been paid
prior to the first Credit Event hereunder.
(5) All amounts outstanding under the Existing
Facility A Agreement and under the Existing Facility B Agreement (as
defined in the Facility B Agreement) shall have been (or shall upon
the happening of the first Credit Event hereunder be) paid in full
and all "Letters of Credit" (as defined in the Existing Facility B
Agreement) shall have been cancelled or replaced with a Letter of
Credit issued hereunder and the Existing Facility A Agreement and
Existing Facility B Agreement and any obligations of the Lenders to
make advances or issue Letters of Credit thereunder terminated;
provided, however, that it is expressly agreed and understood that
"Letters of Credit" issued under the Existing Facility B Agreement
by Lenders which have agreed to be L/C Issuing Lenders hereunder may
be continued as such and shall be deemed in all respects to be
Letters of Credit entitled to all benefits of, and subject to all
restrictions of, the Credit Documents.
7(b) All Credit Events. As conditions precedent to each
Credit Event hereunder, at and as of the date of, and after giving
effect to, such Credit Event:
(1) The representations and warranties of the
Company and the Parent contained in the Credit Documents shall be
accurate and complete in all respects as of such date;
(2) There shall not have occurred a Potential
Default or an Event of Default (other than an Event of Default under
Paragraph 11(a) below which has not been waived by one hundred
percent (100%) of the Lenders) and the Majority Lenders' written
election to cease funding Loans hereunder;
(3) There shall not have occurred an Event of
Default under Paragraph 11(a) below which has not been waived by one
hundred percent (100%) of the Lenders;
(4) Following such Credit Event, the aggregate
principal amount of Facility A Loans outstanding shall not exceed
the applicable limitations of Paragraphs 1(a), 1(b) and 1(c) above;
(5) The Company shall have delivered to the Credit
Agent a duly executed Loan Request, Interest Rate Election and
Payoff Notice requesting such Credit Event;
V82606[7083]94 20
<PAGE>
(6) If the Credit Event is the making of a Discount
Loan: (i) the Company shall have delivered a timely Pre-Funding
Notice with respect thereto; and (ii) the Balance Bank funding said
Discount Loan shall have received from each Lender the amount
payable by such Lender on account thereof pursuant to Paragraph 2(d)
above, it being expressly agreed and understood that in the event
any Lender has not delivered to such Balance Bank the amount payable
by such Lender, the Discount Loan disbursed to the Company shall be
reduced by the amount not received;
(7) If the Credit Event is the making of a
Facility A Loan the proceeds of which will be utilized to repay
CPNs, at the date the CPN or CPNs to be repaid thereby were issued,
the Depositary Agreement was in full force and effect; and
(8) If the Company has delivered a Release Request
to the Collateral Agent pursuant to Paragraph 10(a) of the Security
Agreement, the Majority Lenders have not notified the Credit Agent
in writing that they have elected to terminate the agreement of the
Lenders to continue funding Facility A Loans (if such election and
notification is permitted pursuant to said Paragraph 10(a)).
By delivering a Loan Request, Interest Rate Election and Payoff Notice
to the Credit Agent, the Company shall be deemed to have represented and
warranted the accuracy and completeness of the statements set forth in
subparagraphs (b)(1) through (b)(7) above and all information set forth
in such Loan Request, Interest Rate Election and Payoff Notice.
8. Representations and Warranties of the Company. As an
inducement to the Credit Agent, the Collateral Agent and each Lender to
enter into this Agreement, the Company represents and warrants to the
Credit Agent, the Collateral Agent and each Lender that:
8(a) Financial Condition. The financial statements,
respectively dated the Statement Date and the Interim Date, copies of
which have heretofore been furnished to each Lender, are complete and
correct and present fairly in accordance with GAAP the consolidated and
consolidating financial condition of the Company and its consolidated
Subsidiaries at such dates and the consolidated and consolidating
results of their operations and changes in financial position for the
fiscal periods then ended.
8(b) No Change. Since the Statement Date there has been
no material adverse change in the business, operations, assets or finan-
cial or other condition of the Company or the Company and its consoli-
dated Subsidiaries taken as a whole.
8(c) Corporate Existence; Compliance with Law. The Com-
pany and each of its Subsidiaries: (1) is duly organized, validly
existing and in good standing as a corporation under the laws of the
state of its incorporation, and is in good standing as a foreign
corporation in each jurisdiction where its ownership of property or
conduct of business requires such qualification and where failure to be
V82606[7083]94 21
<PAGE>
in good standing could have a material adverse effect on the Company,
any of its Subsidiaries, or their respective property and/or business or
on the ability of the Company or the Parent to pay or perform the Credit
Documents or on the Collateral; (2) has the corporate power and
authority and the legal right to own and operate its property and to
conduct business in the manner in which it does and proposes so to do;
and (3) is in compliance with all Requirements of Law and Contractual
Obligations except to the extent that failure to comply could not have a
material adverse effect on the Company, any of its Subsidiaries, or
their respective property and/or business or on the ability of the
Company or the Parent to pay or perform the Credit Documents or on the
Collateral.
8(d) Corporate Power; Authorization; Enforceable
Obligations. Each of the Company and the Parent has the corporate power
and authority and the legal right to execute, deliver and perform the
Credit Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of
the Credit Documents. The Credit Documents have been duly executed and
delivered on behalf of each of the Company and the Parent and constitute
legal, valid and binding obligations of such party enforceable against
such party in accordance with their respective terms.
8(e) No Legal Bar. The execution, delivery and perfor-
mance of the Credit Documents, the borrowing thereunder and the use of
the proceeds thereof, will not violate any Requirement of Law or any
Contractual Obligation of the Company or the Parent to the extent that
failure to comply therewith could have a material adverse effect on the
Company or its property and/or business or on the ability of the Company
or the Parent to pay or perform the Credit Documents or on the
Collateral.
8(f) No Material Litigation. Except as disclosed on
Exhibit C attached hereto, no litigation, investigation or proceeding of
or before any court, arbitrator or Governmental Authority is pending or,
to the knowledge of the Company, threatened by or against the Company or
any of its Subsidiaries or against any of such parties' properties or
revenues involving amounts, in the case of any such individual
litigation, investigation or proceeding, in excess of $10,000,000.00 or
which, regardless of the amount in controversy, is likely to be
adversely determined and which, if adversely determined, could have a
material adverse effect on the business, operations, property or
financial or other condition of the Company or any of its Subsidiaries.
8(g) Taxes. The Company and each of its Subsidiaries have
filed or caused to be filed all tax returns that are required to be
filed and have paid all taxes shown to be due and payable on said
returns or on any assessments made against them or any of their property
other than taxes which are being contested in good faith by appropriate
proceedings and as to which the Company or the applicable Subsidiary has
established adequate reserves in conformity with GAAP.
8(h) Investment Company Act. The Company is not an
"investment company" or a company "controlled" by an "investment com-
V82606[7083]94 22
<PAGE>
pany" within the meaning of the Investment Company Act of 1940, as
amended.
8(i) Subsidiaries. Exhibit D attached hereto sets forth
an accurate and complete list of all presently existing Subsidiaries of
the Company, their respective jurisdictions of incorporation and the
percentage of their capital stock owned by the Company or other
Subsidiaries. All of the issued and outstanding shares of capital stock
of the Subsidiaries have been duly authorized and issued and are fully
paid and non-assessable.
8(j) Federal Reserve Board Regulations. Neither the
Company nor any of its Subsidiaries is engaged or will engage, princi-
pally or as one of its important activities, in the business of extend-
ing credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of such terms under Regulation U.
No part of the proceeds of any Loan made hereunder will be used for
"purchasing" or "carrying" "margin stock" as so defined or for any pur-
pose which violates, or which would be inconsistent with, the provisions
of the Regulations of the Board of Governors of the Federal Reserve
System.
8(k) ERISA. The Company and each of its Subsidiaries are
in compliance in all material respects with the requirements of ERISA
and no Reportable Event has occurred under any Plan maintained by the
Parent, the Company or any of its or their Subsidiaries which is likely
to result in the termination of such Plan for purposes of Title IV of
ERISA.
8(l) Assets. The Company and each of its Subsidiaries has
good and marketable title to all property and assets reflected in the
financial statements referred to in Paragraph 8(a) above, except
property and assets sold or otherwise disposed of in the ordinary course
of business subsequent to that date. Neither the Company nor any of its
Subsidiaries has outstanding Liens on any of its properties or assets
nor are there any security agreements to which the Company or any of its
Subsidiaries is a party, or title retention agreements, whether in the
form of leases or otherwise, of any personal property except as
reflected in said financial statements referred to in Paragraph 8(a)
above or as permitted under Paragraph 10(a) below.
9. Affirmative Covenants. The Company hereby covenants and
agrees with the Credit Agent, the Collateral Agent and each Lender that,
as long as any Facility A Obligations remain unpaid or any Lender has
any obligation to make or purchase its Primary Loan Percentage Share of
Facility A Primary Loans or to make Swing Loans or GNMA Pool Advance
Loans or to issue Letters of Credit, the Company shall:
9(a) Financial Statements. Furnish or cause to be
furnished directly to the Credit Agent, the Collateral Agent and each
Lender:
(1) Within ninety (90) days after the last day of
each fiscal year of the Parent, consolidated statements of income
V82606[7083]94 23
<PAGE>
and statements of changes in cash flow for such year and a balance
sheet as of the end of such year (including therein as supplemental
information, consolidating statements of income and statements of
changes in cash flow and balance sheets as of the end of such year)
in each case presented fairly in accordance with GAAP and, in the
case of the Company, the requirements of HUD Handbook IG 4000.3 REV
and accompanied, in all cases, by an unqualified report of a firm of
independent certified public accountants acceptable to the Majority
Lenders;
(2) Within forty-five (45) days after the last day
of each calendar month: (i) consolidated and consolidating
statements of income and statements of changes in cash flow of the
Parent and its Subsidiaries for such calendar month and balance
sheets as of the last day of such calendar month presented fairly in
accordance with GAAP, in each case certified in writing as to
fairness of presentation by the chief financial officer or treasurer
of the Company and the Parent, and (ii) a Covenant Compliance
Certificate from the chief financial officer or treasurer of each of
the Company and the Parent, certifying that there does not exist an
Event of Default or Potential Default and, in addition,
demonstrating in detail satisfactory to the Majority Lenders the
Company's compliance with the financial covenants set forth in
Paragraphs 10(h), 10(j), 10(k), 10(l), 10(m), 10(n) and 10(o) below
as of and at the end of such month, and the Parent's compliance with
the financial covenants set forth in Paragraphs 11(d), 11(e), 11(f),
11(g) and 11(h) of the Guaranty, as of and at the end of such month.
(3) As soon as is available any written report per-
taining to material items in respect of the internal control matters
of the Parent or the Company submitted to any of such Persons by
their respective independent accountants in connection with each
annual or interim special audit of the financial condition of such
Persons made by such independent public accountants; and
(4) Copies of all proxy statements, financial state-
ments, and reports which the Parent sends to its stockholders, and
copies of all regular, periodic and special reports, and all
registration statements under the Securities Act of 1933, as amended
(the "Act"), which the Parent or the Company files with the
Securities and Exchange Commission or any governmental authority
which may be substituted therefor, or with any national securities
exchange; provided, however, that there shall not be required to be
delivered hereunder to the Credit Agent such copies for any Lender
of prospectuses relating to future series of offerings under
registration statements filed under Rule 415 of the Act or other
items which such Lender has indicated in writing to the Parent or
the Company from time to time need not be delivered to such Lender.
9(b) Certificates; Reports; Other Information. Furnish or
cause to be furnished directly to the Credit Agent and each Lender:
(1) No later than 6:00 p.m. (Los Angeles time) on
the second Business Day of the first and third full week of each
V82606[7083]94 24
<PAGE>
calendar month (and at such other times as the Majority Lenders,
through the Credit Agent, may reasonably request), a Borrowing Base
Certificate as of the close of business on the last day of the
immediately preceding week;
(2) Within forty-five (45) days after the last
Business Day of each calendar month, prepared as of such last
Business Day and certified by an appropriate officer of the Company,
a report covering the servicing portfolio of the Company covering
such matters as the Majority Lenders, through the Credit Agent, may
reasonably request (but which shall in any event list the aggregate
principal amount of mortgage notes serviced and the number and types
of loans evidenced by such notes, and show all loans in the
servicing portfolio more than thirty (30) days past due the due
dates set forth in such notes);
(3) Promptly, such additional financial and other
information, including, without limitation, financial statements of
the Company, the Parent, any Affiliate of the Company or the Parent,
or any Approved Investor (other than FNMA or FHLMC) and information
regarding the Collateral as any Lender, through the Credit Agent,
may from time to time reasonably request, including, without
limitation, such information as is necessary for any Lender to
participate out any of its interests in Facility A Loans, GNMA Pool
Advance Loans and Letters of Credit hereunder or to enable another
financial institution to become a signatory hereto; and
(4) Promptly upon receipt thereof by the Company,
copies of all audit reports prepared by or on behalf of FNMA, FHLMC
and GNMA.
9(c) Payment of Indebtedness. Pay, discharge or otherwise
satisfy at or before maturity or before it becomes delinquent, defaulted
or accelerated, as the case may be, all its Indebtedness, except:
(1) Indebtedness (other than Indebtedness with respect to CPNs) being
contested in good faith and for which provision is made to the
satisfaction of the Majority Lenders for the payment thereof in the
event the Company is found to be obligated to pay such Indebtedness and
which Indebtedness is thereupon promptly paid by the Company, and
(2) additional Indebtedness (other than Indebtedness with respect to
CPNs) in the aggregate not to exceed $100,000.00.
9(d) Maintenance of Existence and Properties. Maintain
all rights, privileges, licenses, approvals, franchises, properties and
assets necessary or desirable in the normal conduct of its business, and
comply with all Contractual Obligations and Requirements of Law. The
Company will at all times be a FNMA, FHLMC and GNMA-approved Seller/
Servicer and a wholly-owned Subsidiary of the Parent.
9(e) Inspection of Property; Books and Records;
Discussions. Keep proper books of record and account in which full,
true and correct entries in conformity with GAAP and all Requirements of
Law shall be made of all dealings and transactions in relation to its
business and activities, and permit representatives of each Lender (at
V82606[7083]94 25
<PAGE>
no cost or expense to the Company unless there shall have occurred and
be continuing an Event of Default) to visit and inspect any of its prop-
erties and examine and make abstracts from any of its books and records
at any reasonable time and as often as may reasonably be desired by any
of the Lenders, and to discuss the business, operations, properties and
financial and other condition of the Company and any of its Subsidiaries
with officers and employees of such parties, and with their independent
certified public accountants.
9(f) Notices. Promptly give written notice to the Credit
Agent (who shall promptly notify each of the Lenders and the Collateral
Agent thereof) of:
(1) The occurrence of any Potential Default or Event
of Default or a Negative Security Event;
(2) Any litigation or proceeding affecting the Com-
pany, any of its Subsidiaries or the Collateral involving amounts,
in the case of any such individual litigation, investigation or
proceeding, in excess of $5,000,000.00 or which, regardless of the
amount in controversy, is likely to be adversely determined and
which, if adversely determined, could have a material adverse effect
on the Collateral or the business, operations, property, or
financial or other condition of the Company or the ability of the
Company to pay and perform the Obligations;
(3) Receipt by the Company or the Parent of notice
from any rating agency concerning a potential change in any credit
rating previously accorded the Company or the Parent by such rating
agency;
(4) A material adverse change in the business, oper-
ations, property or financial or other condition of the Parent, the
Company or any of their Subsidiaries; and
(5) The Company's entering into any agreement to
sell or pledge servicing rights (other than in connection with the
acquisition financing therefor) which in the aggregate from and
after the date hereof would exceed $2,500,000,000.00 in aggregate
principal amount of the subject mortgage loans.
9(g) Expenses. Pay all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) of the Credit Agent and
the Collateral Agent incident to the preparation, negotiation,
administration and amendment of the Credit Documents and, following the
occurrence of an Event of Default, of the Credit Agent, the Collateral
Agent and each of the Lenders incident to the protection of the rights
of the Lenders, the Credit Agent and the Collateral Agent under the
Credit Documents, and incident to the enforcement of payment of the
Obligations, whether by judicial proceedings or otherwise, including,
without limitation, in connection with bankruptcy, insolvency,
liquidation, reorganization, moratorium or other similar proceedings
involving the Parent or the Company or a "workout" of the Obligations.
V82606[7083]94 26
<PAGE>
The obligations of the Company under this Paragraph 9(g) shall be
effective and enforceable whether or not any Loan is advanced by any
Lender hereunder and shall survive payment of all other Obligations.
9(h) Credit Documents. Comply with and observe all terms
and conditions of the Credit Documents.
9(i) Insurance. Obtain and maintain insurance with
responsible companies in such amounts and against such risks as are
usually carried by corporations engaged in similar businesses similarly
situated, including, without limitation, errors and omissions coverage
and fidelity coverage in form and substance acceptable under FNMA or
FHLMC guidelines, and furnish the Lenders on request full information as
to all such insurance.
9(j) CPN Program. Obtain the written approval of the
Majority Lenders to any modification of the documentation relating to
the issuance of CPNs of the Company as in effect on the date of this
Agreement.
10. Negative Covenants. The Company hereby agrees that, as
long as any Facility A Obligations remain unpaid or any Lender has any
obligation to make or purchase its Primary Loan Percentage Share of
Facility A Loans or to make Swing Loans or GNMA Pool Advance Loans or to
issue Letters of Credit, the Company shall not, directly or indirectly:
10(a) Liens. Create, incur, assume or suffer to exist,
any Lien upon the Collateral except pursuant to or as permitted under
the Security Agreement or create, incur, assume or suffer to exist any
Lien upon any of its other property and assets (including servicing
rights) other than:
(1) Liens or charges for current taxes, assessments
or other governmental charges which are not delinquent or which
remain payable without penalty, or the validity of which are con-
tested in good faith by appropriate proceedings upon stay of execu-
tion of the enforcement thereof, provided the Company shall have set
aside on its books and shall maintain adequate reserves for the
payment of same in conformity with GAAP;
(2) Liens, deposits or pledges made to secure statu-
tory obligations, surety or appeal bonds, or bonds for the release
of attachments or for stay of execution, or to secure the perfor-
mance of bids, tenders, contracts (other than for the payment of
borrowed money), leases or for purposes of like general nature in
the ordinary course of the Company's business; and
(3) Liens securing Indebtedness permitted pursuant
to Paragraphs 10(c)(2) and 10(c)(6) below (but only to the extent
such Indebtedness is otherwise permitted to be secured under the
terms of the Credit Documents), 10(c)(7) below (but only to the
extent such Indebtedness is secured by property in the nature of
that referred to therein), 10(c)(8) below (but only affecting the
property referred to therein) and 10(c)(9) below (but only to the
extent expressly agreed to in writing by the Majority Lenders).
V82606[7083]94 27
<PAGE>
10(b) Mandatory Coverage. Fail to hold Hedge Contracts
covering all closed Mortgage Loans and Mortgage-Backed Securities which
are not covered by a Take-Out Commitment.
10(c) Indebtedness. Create, incur, assume or suffer to
exist, or otherwise become or be liable in respect of any Indebtedness
except:
(1) The Obligations and obligations with respect to
the CPNs;
(2) Indebtedness reflected in the financial state-
ments referred to in Paragraph 8(a) above;
(3) Subordinated Debt;
(4) Trade debt incurred in the ordinary course of
business, payable within thirty (30) days after the same has become
due or which is being contested in good faith, provided provision is
made to the satisfaction of the Majority Lenders for the eventual
payment thereof in the event it is found that such contested trade
debt is payable by the Company;
(5) Indebtedness secured by Liens permitted under
Paragraph 10(a)(1) and (2) above;
(6) Other Indebtedness the documentation for which
does not contain covenants, agreements, terms or conditions more
restrictive than the covenants, agreements, terms and conditions
contained in the Credit Documents; provided, however, that if such
Indebtedness is not a type of Indebtedness existing on the Effective
Date, the aggregate amount thereof shall not exceed $100,000,000.00;
(7) Indebtedness under short term arbitrage lines of
credit, each borrowing under which is secured by certificates of
deposit issued by the lender thereunder, A-1/P-1 commercial paper
issued by domestic U.S. corporations (other than the Company and its
Affiliates) and/or Treasury investments substantially matching said
borrowing in dollar amount and maturity;
(8) Indebtedness in an amount not to exceed
$50,000,000.00 in the aggregate outstanding secured by real property
(including fixtures and improvements thereon) owned by the Company;
and
(9) Other Indebtedness incurred with the prior
written consent of the Majority Lenders, which will not be
unreasonably withheld.
10(d) Consolidation and Merger. Liquidate or dissolve or
enter into any consolidation, merger, partnership, joint venture,
syndicate or other combination, except that the Company may be
consolidated with or merged with any corporation provided that (1) in
V82606[7083]94 28
<PAGE>
any such merger or consolidation the Company shall be the surviving or
resulting corporation and (2) at the time of and immediately after the
effectiveness of such merger or consolidation there shall not have
occurred and be continuing an Event of Default or Potential Default.
10(e) Acquisitions. Purchase or acquire or incur
liability for the purchase or acquisition of any or all of the assets or
business of any Person other than in the normal course of a mortgage
banking-related business (it being expressly agreed and understood that
the acquisition of servicing is a normal course of business activity).
10(f) Payment of Dividends. Declare or pay any dividends
upon any shares of the Company's stock now or hereafter outstanding,
except dividends payable in the capital stock of the Company, or make
any distribution of assets to its stockholders as such, whether in cash,
property or securities, if at the date of payment or distribution
(either before or after giving effect thereto) there should exist an
Event of Default or Potential Default.
10(g) Purchase or Retirement of Stock. Acquire, purchase,
redeem or retire any shares of its capital stock now or hereafter
outstanding for value.
10(h) Investments; Advances; Receivables. Make or commit
to make any advance, loan or extension of credit ("Advances") to, or
hold any receivable ("Receivable") of, or make or commit to make any
capital contribution to, or purchase any stock, bonds, notes, debentures
or other securities ("Investments") of, or make any other investment in,
any Person, except: (1) Advances constituting Mortgage Loans made in
the ordinary course of the Company's business and (2) Investments in,
Advances to, and Receivables of, any Affiliate (and Servicing Pass-
Through Ventures which are not otherwise Affiliates) not to exceed
$50,000,000.00 in the aggregate.
10(i) Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of any of its assets (other than obsolete or worn out
property), whether now owned or hereafter acquired, other than in the
ordinary course of business as presently conducted and at fair market
value (it being expressly agreed and understood that the sale or other
disposition of Mortgage Loans with or without servicing released and the
sale or other disposition of servicing rights are in the ordinary course
of business); provided, however, that in no event shall the Company
enter into any sale and leaseback transaction involving any of its
assets without the prior written consent of the Majority Lenders; and,
provided further, that the Company may sell, lease, assign, transfer or
otherwise dispose of any of its assets to a Subsidiary of the Company
(which, for the purpose of this proviso shall include any limited
partnership the general and limited partners of which are Subsidiaries
of the Company) so long as: (1) all classes of stock of, or partnership
interests in, such Subsidiary are owned, directly or indirectly, by the
Company, (2) such Subsidiary incurs no obligations for third party
indebtedness except such obligations to employees and vendors as are
necessary or desirable in the normal conduct of the business of
servicing 1-4 unit single family mortgage loans and in managing an
office building owned by such Subsidiary, and (3) any such unpaid
V82606[7083]94 29
<PAGE>
obligations as are described in subsection (2) above (other than payroll
and benefits obligations to employees) shall not exceed at any time
$50,000,000.00 in the aggregate.
10(j) Debt to Adjusted Net Worth Ratio. Permit its ratio
of Total Debt (excluding Indebtedness under repurchase agreements
relating to Mortgage-Backed Securities issued or supported by FNMA,
FHLMC or GNMA) to Adjusted Net Worth to be more than 7.5:1.0 on and as
of the last day of any calendar month.
10(k) Current Ratio. Permit its ratio of Current Assets
to Current Liabilities to be less than 1.05:1.0 on and as of the last
day of any calendar month.
10(l) Minimum Adjusted Net Worth. Permit its Adjusted Net
Worth:
(1) On and as of the last day of any calendar month
during the period commencing on the Effective Date to and including
February 28, 1994, to be less than $712,000,000.00; and
(2) On and as of the last day of any calendar month
thereafter to be less than the greater of $712,000,000.00 and
seventy five percent (75%) of its Adjusted Net Worth as of
February 28, 1994.
10(m) Minimum Net Worth. Permit its net worth determined
in accordance with GAAP:
(1) On and as of the last day of any calendar month
during the period commencing on the Effective Date to and including
February 28, 1994, to be less than $578,000,000.00; and
(2) On and as of the last day of any calendar month
thereafter to be less than the greater of $578,000,000.00 and eighty
five percent (85%) of its net worth determined in accordance with
GAAP as of February 28, 1994.
10(n) Minimum Inventory and Unencumbered Servicing
Portfolio. Permit on and as of the last day of any calendar month the
sum of:
(1) One percent (1%) of the aggregate outstanding
principal balance of the Company's unencumbered servicing
portfolio with respect to single family residential mortgage
loans (excluding from the aggregate principal balance of
servicing otherwise includable in the calculation hereof:
(i) all Company-owned residential mortgage loans, (ii) all Parent
and Affiliate-owned residential mortgage loans if the right of
the Company to service such residential mortgage loans is not
V82606[7083]94 30
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freely transferable without the consent of the Parent or such
Affiliate, and (iii) all residential mortgage loans subserviced
by the Company); plus
(2) The Collateral Value of the Borrowing Base
minus the Aggregate Credit Exposure,
to be less than $200,000,000.00.
10(o) Restriction on Refinance Risk Debt. Permit at any
date the aggregate dollar amount of Refinance Risk Debt which will
mature during any calendar quarter occurring during the period from the
Effective Date through the twelfth month following the Facility A
Maturity Date (but excluding Indebtedness of the Company incurred under
Master Note Agreements substantially in the form of Exhibit N to the
Glossary) to exceed $100,000,000.00.
11. Events of Default. Upon the occurrence of any of the
following events (an "Event of Default"):
11(a) The Company shall fail to make any payment on
account of that portion of the Obligations consisting of principal or
interest on Loans or L/C Drawings on the date when due; or
11(b) Any representation or warranty made or deemed made
by the Company or the Parent in any Credit Document or in connection
with any Credit Document shall be materially inaccurate or incomplete in
any respect on or as of the date made or deemed made; or
11(c) The Company shall default in the observance or
performance of any covenant or agreement contained in Paragraph 10 above
(other than those contained in Paragraphs 10(j), 10(k), 10(l), 10(m),
10(n) and 10(o)) or in the Security Agreement; or
11(d) The Parent shall fail to observe or comply with any
term or provision contained in the Guaranty (other than those contained
in Paragraphs 11(d) and 11(e)); or
11(e) The Company or the Parent shall fail to observe or
perform any other term or provision contained in the Credit Documents
and such failure shall continue for thirty (30) days; or
11(f) The Company or any of its Subsidiaries or the Parent
shall default in any payment of any Indebtedness (other than the
Obligations or as permitted under Paragraph 9(c) above) in an aggregate
amount of more than $5,000,000.00 or any other event shall occur, the
effect of which other event is to permit the holder or holders thereof,
or any trustee or agent for such holders, to cause such Indebtedness to
become due and payable prior to its stated maturity; or
11(g) (1) The Parent, the Company or any of its
Subsidiaries shall commence any case, proceeding or other action
(i) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
V82606[7083]94 31
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debtors, seeking to have an order for relief entered with respect to it,
or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (ii) seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its
assets, or the Parent, the Company or any of its Subsidiaries shall make
a general assignment for the benefit of its creditors; or (2) there
shall be commenced against the Parent, the Company or any of its
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (1) above which (i) results in the entry of an order for
relief or any such adjudication or appointment, or (ii) remains
undismissed, undischarged or unbonded for a period of sixty (60) days;
or (3) there shall be commenced against the Parent, the Company or any
of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within sixty
(60) days from the entry thereof; or (4) the Parent, the Company or any
of its Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (1), (2) or (3) above; or (5) the Parent, the
Company or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
11(h) (1) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (2) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or nor waived, shall exist
with respect to any Plan, (3) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or institution of
proceedings is, in the reasonable opinion of the Credit Agent, likely to
result in the termination of such Plan for purposes of Title IV of
ERISA, and, in the case of a Reportable Event, the continuance of such
Reportable Event unremedied for ten days after notice of such Reportable
Event pursuant to Section 4043(a), (c) or (d) of ERISA is given or the
continuance of such proceedings for ten days after commencement thereof,
as the case may be, (4) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (5) any withdrawal liability to a
Multiemployer Plan shall be incurred by the Company or the Parent or any
Commonly Controlled Entity, or (6) any other event or condition shall
occur or exist; and in each case in clauses (1) through (6) above, such
event or condition, together with all other such events or conditions,
if any, could subject the Parent, the Company or any of its Subsidiaries
to any tax, penalty or other liabilities in the aggregate material in
relation to the business, operations, property or financial or other
condition of the Parent, the Company or any of its Subsidiaries; or
V82606[7083]94 32
<PAGE>
11(i) One or more judgments or decrees in amounts
aggregating $1,000,000.00 or more not fully covered by insurance
(exclusive of self-insurance (not to exceed $5,000,000.00) and
deductibles) during any consecutive twelve (12) month period shall be
entered against the Company or any of its Subsidiaries and all such
judgments or decrees shall not have been vacated, discharged or
satisfied, or stayed or bonded pending appeal, within sixty (60) days
from the entry thereof unless counsel to the Company reasonably
acceptable to the Majority Lenders has delivered to the Lenders within
such sixty (60) day period an opinion that the Company has the legal
right to have such judgment or decree vacated without the expenditure of
funds (other than for costs of proceedings) and the Company is
diligently proceeding to accomplish such vacation; or
11(j) The Parent shall notify the Credit Agent, the
Collateral Agent or any Lender of its intention to rescind or revoke the
Guaranty or the Subordination Agreement, in whole or in part, with
respect to future transactions or otherwise; or
11(k) The Parent shall cease to own one hundred percent
(100%) of the outstanding capital stock of the Company; or
11(l) The Credit Agent or the Collateral Agent receives
notice from the Paying Agent that the Company has failed to cover an
overdraft in the Commercial Paper Account on or before the close of
business of the Paying Agent in New York on the Business Day immediately
following the date on which such overdraft was created;
THEN:
(i) Automatically upon the occurrence of an Event
of Default under Paragraph 11(g) above,
(ii) At the option of any Lender upon the occurrence
of an Event of Default under Paragraph 11(a) above unless such
Event of Default is expressly waived in writing by one hundred
percent (100%) of the Lenders, and
(iii) In all other cases, at the option of the
Majority Lenders,
each Lender's obligation to make or purchase Facility A Loans, the
obligation of the GNMA Pool Advance Lender to make GNMA Pool Advance
Loans and the obligation of the L/C Issuing Lenders to issue Letters of
Credit shall terminate, the principal balance of outstanding Facility A
Loans and GNMA Pool Advance Loans and interest accrued but unpaid
thereon and all other Facility A Obligations shall become immediately
due and payable and the aggregate contingent liability of the Company to
reimburse each L/C Issuing Lender for L/C Drawings under outstanding
Letters of Credit shall be deemed immediately due and payable, without
demand upon or notice or presentment to the Company, all of which are
hereby waived. Immediately upon the occurrence of an Event of Default
and termination of the obligation of the Lenders to make or purchase
Facility A Loans, of the GNMA Pool Advance Lender to make GNMA Pool
V82606[7083]94 33
<PAGE>
Advance Loans and of the L/C Issuing Lenders to issue Letters of Credit,
the Credit Agent shall notify the Paying Agent thereof and is hereby
irrevocably authorized to instruct the Paying Agent to cease issuing
CPNs on behalf of the Company. Following the occurrence and during the
continuance of an Event of Default, the Company agrees that the Company
and the Credit Agent shall, at the request of the Majority Lenders,
implement certain procedures with respect to the Company's funding of
Wet Funded Loans, all at the Company's sole expense. Such procedures
may include, but are not limited to: a. reducing the advance rate
against Wet Funded Loans for purposes of determining the Collateral
Value of the Borrowing Base for Wet Funded Loans, b. requiring that if
(1) Wet Funded Loans are funded with wire transfers, such wire transfers
originate from accounts located at a lending office of a Lender, (2) Wet
Funded Loans are funded with drafts, such drafts be drawn on accounts
located at a lending office of a Lender, and (3) Wet Funded Loans are
funded from accounts which are not located at a lending office of a
Lender, the financial institution which holds such account enter into an
agreement with the Company and the Credit Agent which shall provide that
the Credit Agent shall have exclusive dominion and control over the
funds in such account, c. requiring the closing agents for such Wet
Funded Loans to enter into escrow or other agreements regarding the
monies used to fund such Wet Funded Loans, and d. requiring the Company
to provide the Credit Agent and the Lenders with such information
regarding the funding of Wet Funded Loans as the Majority Lenders may
reasonably request. The Company, at its expense, shall from time to
time execute and deliver to the Credit Agent all such assignments,
certificates, supplemental documents, and financing statements, and
shall do all other acts or things, as the Credit Agent may reasonably
request in order to more fully implement such procedures.
12. Agency Provisions.
12(a) Appointment. Each Lender hereby irrevocably
designates and appoints each Agent as the agent of such Lender under the
Credit Documents and each Lender hereby irrevocably authorizes each
Agent, as the agent for such Lender, to take such action on its behalf
under the provisions of the Credit Documents and to exercise such powers
and perform such duties as are expressly delegated to such Agent by the
terms of the Credit Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in the Credit Documents, no Agent shall have any
duties or responsibilities, except those expressly set forth herein or
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into the Credit Documents or otherwise exist
against any Agent.
12(b) Delegation of Duties. Each of the Collateral Agent
and the Credit Agent may execute any of its duties under the Credit
Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties. Neither the Collateral Agent nor the Credit Agent shall be
responsible for the negligence or misconduct of any agents or attorneys-
in-fact selected by it with reasonable care.
V82606[7083]94 34
<PAGE>
12(c) Exculpatory Provisions. No Agent nor any of their
respective officers, directors, employees, agents, counsel, attorneys-
in-fact or Affiliates shall be (1) liable to any Lender, any other
Agent, the holder of any CPN or the Company for any action taken or
omitted to be taken by it or such Person under or in connection with the
Credit Documents (except for its or such Person's own gross negligence
or willful misconduct), or (2) responsible in any manner to any of the
Lenders, the other Agent, the holder of any CPN or the Company for:
(i) any recitals, statements, representations or warranties made by the
Company or any officer thereof contained in the Credit Documents or in
any certificate, report, statement or other document referred to or
provided for in, or received by such Agent under or in connection with,
the Credit Documents (except such as are prepared by such Agent and,
then, only to the extent such Agent is responsible for verification of
the accuracy and completeness of the information contained therein or
the facts upon which such information is based as expressly provided
herein) or for the value, validity, effectiveness, genuineness,
enforceability, collectability or sufficiency of the Credit Documents or
for any failure of the Company to perform its obligations thereunder or
(ii) any action taken or omitted to be taken by the Collateral Agent
with respect to the Collateral in accordance with written instructions
given as permitted hereunder or (iii) assuring compliance of the Credit
Documents and/or the transactions contemplated by the Credit Documents
with any law or regulation binding upon such Person, it being expressly
acknowledged, agreed and understood that each such Person has obtained
independent advice satisfactory to it in all such regards. No Agent
shall be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained
in, or conditions of, the Credit Documents (other than agreements
required to be complied with by such Agent thereunder and subject to the
standards of care set forth herein with respect thereto) or to inspect
the properties, books or records of the Company. Each Agent shall be
entitled to refrain from exercising any discretionary powers or actions
under this Agreement or any other Credit Document until it shall have
received the prior written consent of one hundred percent (100%) of the
Lenders to such action.
12(d) Reliance by Agent. Each Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certification, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Company), independent accountants and
other experts selected by such Agent. The Credit Agent may deem and
treat the payee of any Facility A Direct Loan Note, Facility A Discount
Loan Note, Negotiated Loan Note, Swing Loan Note or GNMA Pool Advance
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with
the Credit Agent. Each Agent shall be fully justified in failing or
refusing to take any action under the Credit Documents unless it shall
first receive such advice or concurrence of the Majority Lenders (or all
V82606[7083]94 35
<PAGE>
Lenders, as required under the Credit Documents) or it shall first be
indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any action (other than liability and/or expense
arising out of such Agent's gross negligence or willful misconduct).
Each Agent shall in all cases be fully protected in acting, or in
refraining from acting, under the Credit Documents in accordance with a
request of the Majority Lenders (or all Lenders, if applicable) absent
gross negligence and willful misconduct on the part of such Agent in the
method in which it acts or refrains from acting in accordance therewith,
and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders.
12(e) Notice of Default; Agreement to Advance. No Agent
shall be deemed to have knowledge or notice of the occurrence of any
Event of Default or Potential Default unless such Agent has received
notice from a Lender or the Company referring to the Credit Documents,
describing such Event of Default or Potential Default and stating that
such notice is a "notice of default". In the event that any Agent
receives such a notice, such Agent shall give notice thereof to the
Lenders and the other Agent. The Collateral Agent shall take such
action with respect to such Event of Default or Potential Default as
shall be reasonably directed by the Majority Lenders (or all Lenders, as
required under the Credit Documents), through the Credit Agent (subject
to the provisions of Paragraph 18 of the Security Agreement); provided,
however, that unless and until the Collateral Agent shall have received
such directions, the Collateral Agent may (but shall not be obligated
to) take such action or refrain from taking such action (in each case
consistent with the provisions of the Credit Documents), with respect to
such Event of Default or Potential Default as it shall deem advisable in
the best interest of the Lenders.
12(f) Non-Reliance on Agent and Other Lenders. Each
Lender expressly acknowledges that no Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by such
Agent hereafter taken, including any review of the affairs of the
Company, shall be deemed to constitute any representation or warranty by
such Agent to any Lender. Each Lender represents to each Agent that it
has, independently and without reliance upon such Agent or any other
Lender or their respective counsel, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and
other condition and creditworthiness of the Company and made its own
decision to extend credit hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance
upon any Agent or any other Lender or their respective counsel, and
based on such documents, information and legal advice (including,
without limitation, advice of regulatory counsel to it) as it shall deem
appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in entering into the Credit Documents and
taking or not taking action thereunder, and to make such investigation
as it deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of the
V82606[7083]94 36
<PAGE>
Company. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by an Agent hereunder, such
Agent shall not have any duty or responsibility to provide any Lender
with any legal advice or credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Company which may come into the possession of
such Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
12(g) Indemnification. The Company agrees to indemnify,
defend and hold harmless each Agent in its capacity as such from and
against any and all claims, obligations, penalties, actions, suits,
judgments, costs, disbursements, losses, liabilities and/or damages
(including, without limitation, attorneys' fees) of any kind whatsoever
which may at any time be imposed on, assessed against or incurred by
such Agent in any way (1) relating to or arising out of the Credit
Documents or any documents contemplated by or referred to therein or the
transactions contemplated thereby or any action taken or omitted to be
taken by such Agent in connection with the foregoing; provided, the
Company shall not be liable for any portion of any such claims,
obligations, etc., arising out of or resulting from the gross negligence
or willful misconduct of such Agent or (2) resulting from any action
taken or omitted to be taken by such Agent in accordance with written
instructions given as provided in the Credit Documents or (3) relating
to any one or more of the matters covered by Paragraph 12(c) above. The
Lenders agree to indemnify and hold harmless each Agent in its capacity
as such ratably in accordance with their Aggregate Percentage Shares to
the extent required by the Company hereunder if any Agent is not
reimbursed by the Company hereunder and without limiting the obligation
of the Company to do so. The indemnification obligations of the Company
and Lenders under this Paragraph 12(g) shall survive termination of this
Agreement and payment in full of the Obligations.
12(h) Agent in Its Individual Capacity. Any Agent and its
Affiliates may make loans to, accept deposits from and generally engage
in any kind of business with the Company as though such Agent were not
an Agent hereunder. With respect to such loans made or renewed by them
and any note issued to them hereunder, each Agent shall have the same
rights and powers under the Credit Documents as any Lender thereunder
and may exercise the same as thou